Contracts are essential to build trusting business relationships and streamline important transactions. In addition, there are a few other reasons why contracts are important to your business. The contract can be used as evidence if one party sues the other in the event of a breach of contract. Oral agreements are always a risk. You can be sure that the person with whom you enter into an agreement is trustworthy and that the relationship can withstand all obstacles, but people change and memories fade. If you are trying to get a verbal agreement in court, there are always two versions of the story with one person`s word against the other`s. “It will be hard to convince a judge if you don`t have written proof of that and you can spend years arguing on an er-saïd basis,” she said. The costs are considerable. The main purpose of drafting the contract is the recording of the details agreed upon by both parties. It provides an accurate knowledge of the services provided by the third party or the monetary expectations to which the person must meet. This information serves as legitimate evidence and is very important in a treaty. Each company has contracts that have the potential to increase revenue and maximize value.
How can companies best use them to fulfill good intentions and achieve goals? In our experience, they work well until they don`t, and it can quickly become angry, which can lead to the disintegration of relationships, agreements, transactions and even complete transactions. In the past, business was simple. Two people agreed to trade and both sides kept their word. But in the 21st century, professionals are all too aware of the long history of deal-breaking and the disputes that have unfolded around them. In the economy, contracts are important because they represent expectations for both parties, they protect both parties if those expectations are not met, and they set the price paid for services. A written contract, which explicitly appeals to the expectations of both parties, creates legal protection for both parties.